Dickinson v. Board of Trade , 114 Ill. App. 295 ( 1904 )

Mr. Presiding Justice Freeman

delivered the opinion of the court.

The grounds upon which appellant relies for reversal of the judgment against him in this case are, first, that section 3 of rule 14 of the rules and by-laws of the Board of Trade is contrary to the law of the land, not authorized by the charter nor germane to the purposes and objects of the corporation, in that it tends to control the necessaries of life and services, and to create a monopoly, and that it is therefore invalid; second, that the proceedings to expel appellant, as shown by the corporate records, were without due notice and not in accordance with the rules and bylaws. Hence it is claimed petitioner’s expulsion for alleged violation of said rule 3 was an act beyond the legal power of the directors of the Board of Trade, and that mandamus is an appropriate remedy to set aside the order of expulsion and to reinstate appellant.

It is urged in behalf of appellant that any combination restraining freedom of trade so as to increase the price of commodities or services and prevent competition in fixing prices, is illegal and contrary to public policy, and that rule 3 comes within this legal prohibition. That rule as above stated prohibits, on pain of expulsion, any member of the Board of Trade of Chicago from charging less than a fixed minimum rate of commission to non-members of the Board for the purchase or sale of grain in specified quantities. Appellant contends that the rule does necessarily restrain freedom of trade and increase the price of commodities to the general public. The Board is by its charter authorized to make such rules, regulations and by laws as it may deem proper, “ not contrary to the laws of the land.” It does not itself carry on the business of buying and selling nor of dealing in commodities. Its objects are stated in its charter to be inter alia “ generally to secure to its members the benefits of co-operation in the furtherance of their legitimate pursuits.” It maintains a commercial exchange where its members carry on their business, and furnishes them facilities for so doing to such an extent that one not a member cannot, as it seems to be conceded, profitably engage in buying and selling in Chicago the commodities in which its members deal. Expulsion from membership therefore involves serious consequences to the member expelled, and inability to become a member precludes one seeking to engage in the lines of business carried on upon the Board from profitably so doing, and in a sense gives to its membership a monopoly. If the rule complained of is “ contrary to the law of the land,” then it is in violation of the Board’s express charter powers.

In More v. Bennett, 140 Ill. 69-76, the parties were members of a voluntary association not incorporated. One of its members sued to recover damages caused by an alleged breach on the part of another member, of a rulé of the association forbidding the members to do stenographic work at • less than'fixed rates in competition with each other. The by-laws provided for trial and punishment of members violating the rules. The rule referred to was held to be obnoxious to well-settled rules of public policy in so far “ as to - render it improper for the courts to lend their aid for its enforcement; ” its object being “ to stifle or prevent competition and thereby to enhance or diminish prices to a point above or below what they would have been if left to the influence of unrestricted competition.” A rule may, however, be contrary to public policy and not so far “ contrary to the law of the land ” as to be unenforcible upon its own members by the voluntary association by which it is enacted. When it is sought to invoke the aid of the courts for the enforcement of such rule the aid will be withheld, but on the other hand the courts will not necessarily interfere with its enforcement by and among those who have voluntarily adopted the rule for their own guidance or convenience, and by an association whose members have been admitted upon condition of obedience to rules and regulations of their own creation.

When appellee was incorporated it was provided in section 6 of the act, that the corporation should “ have the right to admit or expel such persons as they may see fit in manner to be prescribed by the rules, regulations and bylaws.” It is appellant’s contention, not that appellee cannot expel a member in pursuance of a valid by-law, but that in this case the expulsion ivas in pursuance of a by-law which he contends has no force whatever, because contrary to public policy. In Stock Exchange v. Board of Trade, 127 Ill. 153, the nature, constitution and growth of the influence and power of the Board of Trade and its relations to its members and others are considered. It is there held that while it is a private corporation, yet that where, by conduct of its affairs through a long term of years its system of market reports has become impressed with a public interest, it cannot be allowed to discriminate between persons whom it has been serving, and so create monopolies and dictate who shall deal in agricultural products, enriching some and impoverishing others at will. It was held error, therefore, to dismiss the bill of complaint. The People v. Live Stock Exchange, 170 Ill. 556, was an information in the nature of a quo warranto questioning a by-law of the exchange, claimed to be an abuse of its corporate franchise. It was held that leave to file the information should be granted, the by-law in controversy constituting a restriction on freedom of trade and business and hence an abuse of the corporate franchise of the exchange. The questions decided in these two cases are very different from that now before us. It may be that upon quo warrwnto the by-law here under consideration might be questioned and the court would then determine its propriety and lawfulness. In the case at bar, however, it is sought to compel the Board to reinstate a member expelled for violating the by-law. The answer of appellee sets forth the reasons which led to its adoption. It is not claimed that the minimum rate of commission fixed in the by-law is unreasonable in itself, and it appears from the answer which is demurred to, that its enforcement is in the interest of the Board and of the members themselves. The Board is a private corporation and its business is not juris publici. Live Stock Co. v. Chicago Live Stock Exchange, 143 Ill. 210-237. It furnishes a place for its members to do business and facilities therefor, and in return for that privilege requires them not to charge less than a minimum reasonable commission on commodities they deal in with its aid. In this it violates no statute of the state. In Carew v. Rutherford, 106 Mass. 1, it is held not a crime for a number of persons without an unlawful object to associate themselves and agree not to work for less than a certain price. The by-law does not interfere with the freedom of those not members. It is confined in its operation to those who have voluntarily agreed to be bound by it. It has been repeatedly held that cooperation and combination by workmen to maintain or increase wages are legitimate and sanctioned by law. Curran v. Galen, 152 N. Y. 33-36; Snow v. Wheeler, 113 Mass. 179. In Master Stevedores’ Ass’n v. Walsh, 2 Daly, 1, a by-law to this end limited to the members of the corporation is held not in restraint of trade. The. minimum price fixed in the by-law here in controversy is not unreasonable. We conclude that its enforcement infringes no rule of law dr public policy, confined as it is to the members of the Board, upon whom alone it operates, and by whom it has been enacted for their own government.

In Board of Trade v. Nelson, 162 Ill. 431, 438, it is said that “the courts will never interfere to control the enforcement of by-laws of such an association, but they will be left to enforce their rules and regulations by such means as they may adopt for their government,” and attention is called to the fact that the court has repeatedly refused to interfere with the disciplinary powers of the Board in equity as well as law. In People ex rel. Rice v. Board of Trade, 80 Ill. 134-137, it is said that where a member of a corporation created for the gain of its stockholders is deprived of a charter right, a court may by mandamus compel the body to admit him to the exercise of such right; but that “courts never interfere to control the enforcement of the by-laws of merely voluntary associations;” that such organizations “must be left to enforce their rules and regulations by such means as they may adopt for their government.” It is held in that case that the Board of Trade of Chicago, appellee herein, is a voluntary organization empowered by its charter “to govern in such mode as it may deem most advisable and proper.”

In Ryan v. Cudahy, 157 Ill. 108, reference is had to the case last referred to, and it is said that expressions in that opinion to the effect “that a court would not interfere in any case with the action of an organization like the Board of Trade,” are not to be regarded as authority, although the case properly held that one expelled after a full opportunity to make defense could not be restored by mandamus. While disclaiming any intention of interfering with the disciplinary power of the Board" over its members, it is held in the Ryan v. Cudahy case (p. 119), that where property rights are involved between members of the Board the courts have the power to so far supervise the action of the board’s tribunal as to determine whether it has proceeded according to the rules and regulations provided for its action, “and if they have failed in a substantial manner, correct abuses which may result from their unwarranted procedure.”

We find no evidence that the Board has not proceeded in the present case in accordance with its rules and regulations. It appears that the consideration of the • charges was postponed from the date originally set and the case was finally disposed of on the day to which postponement was had. In this, so far as we are advised, no irregularity appears.

Finding no warrant for interference with the action of the Board complained of, the judgment of the Circuit Court must be affirmed.

Affirmed.

Mr. J ustice Baker took no part.